David Cameron has been accused of exaggerating the benefits of his tax break for married couples after wrongly saying it would benefit every basic rate taxpayer.

The prime minister is facing calls to issue a correction after he said "all married couples paying basic rate tax will benefit" from his policy. In fact, it will only benefit couples where there is one basic rate taxpayer and one person who earns less than the personal tax allowance. The tax break, worth around £200 a year from 2015, will not help the millions of married couples that include two basic rate taxpayers.

Following the slip, Ed Balls, the shadow chancellor, asked Cameron to clarify his comments, saying his statement was "just not true".

"Can I go back to the prime minister's answer to the leader of the opposition on the marriage tax break?" he said.

"When asked whether it was true that a third of married couples would benefit, the prime minister said that all married couples that are basic rate taxpayers would benefit.

"Would the prime minister like to correct the record, because that is just not true?"

In response, Cameron changed his wording slightly, saying it would be "available" to every person with a basic rate of tax.

"The point is the married couples allowance is available to every basic rate taxpayer," he said. "I think that is something to celebrate in our country. I stand up for marriage, even if you want to talk it down."

He concluded with a dig at Balls, drawing cheers from the Tory benches, saying: "Can I thank you once again for your tenacity, even though you've been proved wrong on every major economic question that you're still in your place.

"You're the great election winner for us."

The tax break will only be available to basic rate taxpayers who are married to someone who earns less than the personal tax allowance.

A Labour source said: "We will be writing to No 10 to say the prime minister must correct the record when he says: 'All married couples paying basic rate tax will benefit from this move.' This is simply wrong and it must be corrected.

"The prime minister is so out of touch he lives in a world where he obviously thinks that all women should do is stay at home."

• This article was amended on 11 October 2013. The earlier version said incorrectly that the tax break for married couples would "only benefit couples where there is one basic rate taxpayer and one person who does not earn anything", and that it would "only be available to basic rate taxpayers who are married to someone who does not work".